In Year 1,a Company Had Net Sales of $50,000 and Ending

question 22

Multiple Choice

In year 1,a company had net sales of $50,000 and ending accounts receivable of $2,000.In year 2,this company had net sales of $80,000 and ending accounts receivable of $4,000.Use days' sales uncollected to determine which of the following statements is true:

• A)Days' sales uncollected in year 1 is 14.6 days and in year 2 is 18.25 days.This measure indicates that the company's liquidity is declining.
• B)Days' sales uncollected in year 1 is 14.6 days and in year 2 is 18.25 days.This measure indicates that the company's liquidity is improving.
• C)Days' sales uncollected in year 1 is 25 days and in year 2 is 20 days.This measure indicates that the company's liquidity is declining.
• D)Days' sales uncollected in year 1 is 25 days and in year 2 is 20 days.This measure indicates that the company's liquidity is improving.
• E)Days' sales uncollected in year 1 is .04 days and in year 2 is .05 days.This measure indicates that the company's liquidity is improving.

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Definitions:

Contraception

Techniques or instruments designed to avoid conception following sexual activity.

Ignorance

A lack of knowledge, understanding, or information about something.

Alcohol Use

The consumption of beverages that contain ethanol, ranging from moderate drinking to alcohol abuse.

Sexual Infidelity

The act of being unfaithful in a sexual sense in a committed relationship, breaching an expectation of sexual exclusivity.